What is HECM Counseling and Who Pays for it?
Before a reverse mortgage application can be processed, the federal government (HUD) requires potential borrowers to speak with an approved reverse mortgage counselor, also known as a HECM Counselor. The objective of the counseling is so potential borrowers understand the benefits and limitations of a reverse mortgage as explained by an individual without a financial incentive to sell one. During the confidential session, counselors make sure the potential borrower understands the financial implications of a reverse mortgage and the possible alternatives.
At the completion of the counseling session, seniors are provided with a certificate stating they have undergone reverse mortgage counseling. This certificate must be provided to the lender in order for a reverse mortgage to proceed.
The counseling session takes about one hour and can be provided in person or over the telephone. There is a counseling fee that ranges from approximately $125 – $175, although many organizations receive grants that allow them to waive the fee and therefore can offer counseling for free. However, in 2011, one major federal grant that allowed for free counseling was not extended. Some organizations have found other sources to enable them to continue to waive the fee. Other organizations have made it possible to have the individual pay for the counseling from the proceeds of the reverse mortgage once it has been completed.
HUD Approved Credit Counseling Agencies that Provide HECM Counseling
| Credit Counseling Agency | States | Phone
Counseling | In Person
Counseling |
| CCCS of Central New York is your solution to budgeting, credit and debt problems. Since 1972, we have been helping people just like you take control of their money and get on the right track to financial stability. | Nationwide | Yes | Yes |
| CCCS of MD & DE is an accredited, nonprofit community service organization dedicated to helping individuals and families resolve financial problems. | Nationwide except MA and SC | Yes | Yes |
| CCCS of Greater San Antonio is a 501(c)(3) nonprofit financial counseling agency that helps people manage their money and get out of debt. | Texas | Yes | Yes |
| Catholic Charities of the Diocese of St. Cloud is a non-profit, and HUD certified organization that assists individuals and families as they take control of their finances and plan for a secure financial future. | Nationwide | Yes | Yes |
| Consumer Credit Counseling Service(CCCS) of North Central WV offers credit counseling and housing counseling which includes reverse mortgage, foreclosure prevention and pre/post purchase. | Nationwide | Yes | Yes |
| Consumer Credit Counseling Service of Southern WV is a non profit dedicated to help people improve their financial well being through counseling, community outreach, and financial education regardless of the individual’s ability to pay. | Nationwide except NC and MA | Yes | Yes |
| Institute for Financial Literacy provides financial, housing and forbearance counseling and educational programs that equip individuals to develop and pursue sound financial habits that last a lifetime. | Nationwide | Yes | Yes |
